Key ship insurer the China P&I Club will halt indemnity coverage for tankers carrying Iranian oil as Western nations tighten sanctions on OPEC's second largest producer, two club officials told Reuters on Thursday.
China is Iran's top buyer of crude and this is the first sign the country's refiners may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran's other top customers -- India, Japan and South Korea -- are running into the same problems.
The China P&I Club, which provides coverage to more than 1,000 vessels, is the first Chinese maritime insurer to confirm it will halt business with tankers operating in Iran, following similar action in Japan.
Starting in July, European insurers and reinsurers will be barred from indemnifying ships carrying Iranian crude and oil products anywhere in the world, in line with sanctions on Tehran.
"Many ship owners want to join our club and want our club to cover this risk, but considering all these regulations from the United States and the EU, I know the China P&I club will not do that," a Hong Kong-based club official said.
"We have asked our members not to go there, if they go there, they take their own risk," the official added.